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USD Index in a Gartley after Yellen's Testimony

Janet Yellen completed a 2-day congressional testimony, defending the Fed's monetary policy as well as her stance on various banking regulations including rules for the Fed. However she did NOT shed any light on any changes to the FOMC's rate hike time-line, which is currently projected to mid-2015.

The US Dollar Index (USDX) has been bullish July, rallying against a decline in June from the high on the year near 81 to about 79.75. The 4H chart shows that July's rally came in 3 waves. You can call this an ABC correction. Harmonic traders look at it as an ABCD pattern, where AB = BC. Also, note that today's price around 80.50 is around 61.8% retracement of June's decline. With the 4H RSI above 70 showing overbought condition, harmonic traders would look at this as a Gartley pattern and as an opportunity to sell.

(USDX 4H Chart, 7/16)

BUT, without an established bearish trend (June's decline does not qualify as a trend yet), the bearish outlook needs to be tempered until price can break below July's rising support. Still let's look at the near-term bearish scenario in the 1H chart. We see that the 1H chart shows a bullish market this week. However, with the RSI coming down from overbought levels, if price pushes below 80.50, we would have a mini-price top, and can anticipate an intra-session bearish swing. If this happens, watch out for support in the 80.20-80.25 area. If the market is indeed turning bullish in July, this area should hold. If price instead falls below 80.15, and clears July's rising support, there is further USD-consolidation, or weakness ahead for the rest of the month.